Budget set for Feb 26, could spark election

OTTAWA (Reuters) - The minority Conservative government
will present its 2008-09 budget on February 26, a document that
could trigger an election in mid-April.

After Finance Minister Jim Flaherty announced the budget
date in Parliament on Monday afternoon, he took note of the
uncertain times, and promised to stay out of deficit.

"In this budget, we will be doing what households and
businesses do when things are uncertain: we will be acting in a
responsible manner," he said.

"So this is a time ... of limited economic growth where you
have to have a solid hand on the tiller and you have to be very
careful on the spending side and manage things well."

The Conservative government, elected in January 2006 after
more than 12 years of Liberal rule, has already warned that the
budget will not contain big tax cuts or spending programs.

If the budget is not passed, the government will fall and
there will be a federal election, most likely on April 14,
although Prime Minister Stephen Harper could set it for some
time after that.

Since Flaherty already unveiled C$60 billion ($60 billion)
in tax cuts over five years last October, he said he would
spend much of his time in this month's budget recounting the
accomplishments of the Conservatives' two years in power.

"Canada is in the best position, really, of the G7
countries to go through what are more difficult economic
times," he said, speaking of the Group of Seven leading
industrialized nations.
Continued...